‘Max pressure, a negotiating tactic’: Why Trump’s 25% tariff on India may be a deal-making play

Despite the sharp rhetoric, both experts stressed that the underlying US-India strategic partnership remains intact.

US President Donald Trump’s sudden announcement of a 25 percent tariff and additional penalties on Indian goods has stirred concerns about the future of US-India trade ties. But experts say this move may be more of a hardline negotiating tactic than a permanent policy shift.

In a post on Truth Social, Trump accused India of maintaining some of the 'highest tariffs in the world' and continuing extensive energy and defense purchases from Russia. The new tariffs, along with unspecified penalties, will take effect on August 1.

“India will therefore be paying a tariff of 25 percent, plus a penalty… starting on August 1st,” Trump declared, framing the move as part of his broader effort to correct trade imbalances and pressure India over its Russia ties.

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‘Very close’ to a trade deal

According to former US Assistant Secretary of State Nisha Biswal, the announcement is less about ending talks and more about pushing a nearly-finalised trade deal over the finish line.

Speaking to ANI, Biswal revealed that US and Indian negotiators have been working for weeks, even months, on a “phase one” trade agreement that was 'very, very close' to completion.

“What was left was for there to be some leader-level agreement,” she said, suggesting Trump’s tariff threat is designed to “push negotiations across the last mile.”

Biswal described the potential deal as 'unprecedented,' noting that the US and India have lacked any formal trade architecture for decades.

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Pressure over Russia ties

Trump’s criticism of India’s role as Russia’s largest energy buyer and a major arms customer signals a shift from the Biden administration’s more accommodating stance.

“The current president is probably in less of a mindset to accommodate India’s legacy relationships,” Biswal observed, adding that Trump’s “maximal pressure approach” should be seen in the context of securing a better deal, not undermining the strategic partnership.

India weighs its options

India has indicated it may retaliate against the US tariffs, sparking speculation about whether New Delhi might pivot toward European or Asian markets to offset losses.

But Biswal urged caution, saying both sides should avoid 'tit-for-tat measures' and continue dialogue. 'It is in India’s interest to have a trading relationship with its largest trading partner, the United States,” she said.

Drawing parallels to Trump’s earlier tough talks with allies like the UK, Japan, and the EU, she noted that those disputes ultimately ended in more stable agreements.

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‘Temporary tactic, not permanent’

Gaurav Sansanwal, Fellow for the Chair on India and Emerging Asia Economics at CSIS, echoed Biswal’s assessment, calling the tariff move a temporary negotiation ploy.

“This impacts a broad spectrum of sectors… electronics, pharma, refined petroleum products, and gems and jewellery. It is an irritant, but it is not permanent,” he told ANI.

Sansanwal added that New Delhi is likely monitoring the situation closely and working toward a resolution that protects its economic interests.

Leverage over India

On Trump’s use of India’s Russia ties as justification, Sansanwal said it was a strategic move to gain leverage, not a fundamental misunderstanding of New Delhi’s position.

“Given that [the US] wants to exercise more leverage over India in trade talks, it is using that as one of the items through which it can justify or add more colour to what it is trying to do,” he explained.

The bigger picture

Despite the sharp rhetoric, both experts stressed that the underlying US-India strategic partnership remains intact.

“The temptation in India to react to the president’s words [and] say, well, we can’t count on the United States, is an understandable one, but an avoidable one,” Biswal said.

She warned that the situation could “snowball into a much bigger problem” if not managed carefully, but reiterated that Trump’s negotiating style shouldn’t be mistaken for a lack of interest in strengthening ties with India.